Heathrow staff face reduced pension rights and one third will get 30% reduction in salaries by 2018
Heathrow airport is preparing designers, architects and suppliers to build its third runway, though it has not has its runway plans approved – let alone all the stages of consultations, legal challenges, parliamentary stages and planning procedures. But Heathrow says it will be looking at contracts in January for the workers it will need in the first couple of years to get planning consent. John Holland-Kaye keeps up the PR and the spin, capitalising on every opportunity to do so, though refusing to agree to Heathrow paying for associated transport costs, or to no night flight, or even to rule out a 4th runway. But the Financial Times said that Heathrow is “also looking to make more savings on employee costs. By the end of 2018, Heathrow aims to have about a third of its employees on salary packages that are about 30% lower than existing terms and conditions.” Heathrow has to cut its overheads, and agreed with the CAA to remove £600m of costs during the 5 years 2014 to 2018. The FT says it has already secured £400m of cost efficiencies. Heathrow is renegotiating its defined benefit pension plan, to cut costs. The changes include the introduction of an annual cap of 2% on future increases to pensionable pay for active members, resulting in a one-off reduction of £236m in the scheme’s liabilities.
Shock news for Heathrow staff; reduced pension rights and 30% reduction in salaries by 2018
John Holland-Kaye, CEO of Heathrow Airport, has announced that following renegotiations to its defined benefits pension scheme which will cap increases to 2%, he also seeks to inflict pay cuts of 30% on a third of the workforce by 2018.
The announcement was made this afternoon in an article with the Financial Times announcing another profitable year for the airport.
Mr Holland-Kaye said the renegotiation of its defined benefit pension plan, which came into effect from October 1, would further improve costs. The changes include the introduction of an annual cap of 2 per cent on future increases to pensionable pay for active members, resulting in a one-off reduction of £236m in the scheme’s liabilities.
It is also looking to make more savings on employee costs. By the end of 2018, Heathrow aims to have about a third of its employees on salary packages that are about 30 per cent lower than existing terms and conditions.
Full FT article at
Heathrow cutting 200 jobs (20% of total core staff) due to CAA restriction on landing charge rises
Heathrow Airport is planning to cut 20% of its core workforce despite turning its first profit since 2006 and said it is undergoing a “major” restructuring. Its full-year results statement showed it made a £426m pre-tax profit last year, up from a £33m loss previously, helped by the £1.5bn sale of Stansted in February 2013. Heathrow says it is making the staff cuts due to the CAA not allowing it to increase landing charges, though Heathrow can appeal till March 27th. These will be reduced in real terms by 1.5% below the rate of inflation every year until 2019. Colin Matthews said the cuts are likely to affect around 200 staff but no front-line roles, such as security, will be affected. Heathrow employs 7,000 people in total but 1,000 of those roles are part of its “central” head office structure, which is where the job losses are, partly due to having sold off its other airports. In 2013 Heathrow’s revenue rose 11.3% to £2.5bn, and it had 72.3 million passengers, though that is far below earlier forecasts for 2013 traffic. Excluding money from selling Stansted, Heathrow’s EBITDA rose 23.1% in 2013 to £1.4bn. The number employed by Heathrow Airport Ltd in 2012 was 5,278 (compared to 5,265 in 2011 and 5,148 in 2010).